Which of the Following Occurs If Both a Principal and an Agent

question 34

Multiple Choice

Which of the following occurs if both a principal and an agent cannot agree on the compensation?

• A) The principal is no longer bound by the duty of compensation.
• B) Compensation will be calculated on the basis of what is reasonable or customary.
• C) Compensation will be calculated according to government wage rates.
• D) Compensation will be determined by the full faith and credit clause of the U. S. Constitution.

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Definitions:

Revenues

Income earned by a company from its business activities; essentially the gross income figure from which costs are subtracted to determine net income.

Expenses

Expenses or the spending of resources or taking on of liabilities over time due to the delivery or production of goods, provision of services, or other actions that are central to the entity's primary operations.

Utility Expense

Costs incurred by a business or individual for utilities such as electricity, water, and gas.

Cash

Cash refers to company-held currency and bank account balances that are readily available for use.